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Wednesday, 12 July 2017

Contractors want state to include fuel and energy prices hikes under compensation act

Contractors want state to include new fuel and electricity price hikes under Contractors Compensation Act: Contractors are requesting that the state factor in the effects of the latest fuel and energy price hikes when repricing their contracts under the Contractors’ Compensation Act, New Urban Communities Authority (NUCA) chief Zein Al Abidin Mohamed tells Al Borsa. Companies are blaming the rise in the costs of building materials on “the instability of the government’s fiscal policies.” The Housing Ministry has already started revising contracts that came into effect in 2016 and is waiting for the legislation — which will compensate state contractors for losses incurred after the EGP float — to determine the exact price differentials, unnamed government officials tell the newspaper. NUCA’s initial estimates had reportedly set the compensation value at 7% of the original value of the contract, they add. The Sherif Ismail cabinet had approved this month a six-month extension on all contracts with the private sector signed between 1 March and 31 December 2016 to make them eligible for compensation. The bill, however, has been in the works for several months, with rumors even suggesting that the House of Representatives was studying alternatives, claiming the act would cost state coffers EGP 10 bn that it simply can’t afford. Maybe contractors should just be thankful they have that much.

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